Hepatitis C and alcohol are the most widespread causes of liver disease worldwide. Approximately 80% of patients with a history of hepatitis C and alcohol abuse develop chronic liver injury. Alcohol consumption in hepatitis C virus (HCV)-infected patients exacerbates liver disease leading to rapid progression of fibrosis, cirrhosis and even hepatocellular carcinoma. Hepatocytes are the main sites of HCV-infection and ethanol metabolism, both of which generate oxidative stress. Oxidative stress levels affect HCV replication and innate immunity, resulting in a greater susceptibility for HCV-infection and virus spread in the alcoholic patients. In this review paper, we analyze the effects of ethanol metabolism and other factors on HCV replication. In addition, we illustrate the mechanisms of how HCV hijacks innate immunity and how ethanol exposure regulates this process. We also clarify the effects of HCV and ethanol metabolism on interferon signaling—a crucial point for activation of anti-viral genes to protect cells from virus—and the role that HCV- and ethanol-induced impairments play in adaptive immunity which is necessary for recognition of virally-infected hepatocytes. In conclusion, ethanol exposure potentiates the suppressive effects of HCV on innate immunity, which activates viral spread in the liver and finally, leads to impairments in adaptive immunity. The dysregulation of immune response results in impaired elimination of HCV-infected cells, viral persistence, progressive liver damage and establishment of chronic infection that worsens the outcomes of chronic hepatitis C in alcoholic patients.